10 Things to Remember When Your Work is Delayed

Ohio Asphalt MagazineJuly 1, 2015by Don Gregory

As the construction industry slowly
recovers momentum and sales increase, there are increasing reports of labor
shortages that are adversely effecting production and schedule. Many later-finishing trades complain that
their work is being delayed, compressed and/or accelerated as a result. As anyone familiar with construction knows,
“time is money.” Losses incurred as a result by blameless “follow on” trades
towards the end of a delayed job must be absorbed or passed on to those
responsible.

Companies
delayed by a predecessor’s impacts are advised to keep these “Top 10”
suggestions in mind in order to protect their right to additional time and/or
money.

1.
Do
not sign a “no damage for delay” contract clause.

Many contracts contain
“no damage for delay” clauses which state that one’s sole remedy in the event
of a delay is a time extension. While
there are legal exceptions in most jurisdictions, and some states like Ohio make
such clauses unenforceable, it is best to avoid them in the first place.

2.
Do
provide timely notice of your claim.

Every contract requires
timely notice of change orders and claims and many provide that a failure to do
so means that an otherwise legitimate claim is waived. Provide written notice – early and often.

3.
Do
provide timely documentation of your claim.

Many contracts provide
that once a claim is initially made, it must be documented (and sometimes
certified) within a certain number of days after first notice. A failure to do so might undermine the claim.

4.
Do
request a time extension.

Sometimes contractors do not request a
time extension because they know that it will not be granted. But a time extension should always be
requested in the event of project delay.
A failure to do so might undermine your request for additional money due
to acceleration.

5.
Do
not sign off on a flawed schedule.

Sometimes owners refuse
to pay draws until contractors sign unworkable schedules that they do not agree
to. But regardless of the pressure
applied, contractors should not “sign off” on unworkable schedules. At a minimum, you should reserve your rights
and make a notation that your signature on the schedule is not your approval of
it, or a waiver of your damages.

6.
Do
not sign an overly broad lien waiver.

Many lien waivers are now
lengthy and waive more than lien rights for a particular draw. Some purport to waive all rights to
additional compensation in the form of change orders or claims on the project. Do not waive rights for work which is still being
debated or disputed.

7.
Do
not sign an overly broad change order.

A proper change order
will only purport to waive all costs associated with that discrete “change in
the work” that is the subject of the change order. However, some change orders try to waive all
direct and indirect damages associated with “the project” through a particular
date. Be careful not to sign a change
order with overly broad form release language.

8.
Do
try to accurately track your costs.

All request for
additional time and money will be criticized (by those being asked to pay) as
being inadequately documented. But the
better you contemporaneously document and track your costs, the more you can
minimize the criticism of your damages calculations, particularly with respect
to labor inefficiencies.

9.
Do
argue waiver if the contract has not been strictly followed.

Many provisions of thick
construction contracts are disregarded as a practical matter by the parties
during the complex construction process.
Contractors who may have not done everything perfectly may be relieved
of harsh results by arguing that an onerous clause was waived by an owner who
also failed to comply with the contract.

10.
Do
know your deadlines for taking legal action.

Almost all claims will
expire if timely action is not taken in accordance with the contract and any
applicable statute of limitations. Do
not let project inertia or prolonged settlement discussions or negotiations
delay legal action until it is too late.

If you remember these Top
Ten “Do’s” and “Don’ts” the next time you are adversely impacted by schedule
delays, you will be in a much better position to protect your interests.